Italy lowers the premium ceiling ahead of its second grid-scale storage auction

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Italy has set the price ceiling for its next grid-scale storage auction, and it comes in well below the first one.

ARERA, Italy's energy and networks regulator, has fixed the maximum premium for the second auction under the country's long-term storage procurement scheme at 27,000 euro per MWh per year. That is 10,000 euro per MWh per year below the 37,000 ceiling used in the first auction, which procured capacity for delivery in 2028, a reduction of roughly 27 percent. The regulator tied the lower cap to falling battery build costs, using updated cost benchmarks rather than the assumptions that underpinned the first round.

The second auction is scheduled for 24 November 2026 and procures storage capacity toward a requirement of 16 GWh for delivery in 2029. Winning projects receive a fixed annual premium on top of their market revenue, which turns part of a battery's return into a contracted, predictable stream while leaving the rest exposed to energy and ancillary markets.

For storage developers the ceiling matters in two directions. It caps what the scheme will pay, so a project that needed close to the old level to clear will now have less headroom. At the same time it marks where the regulator believes battery economics have moved, and a lower cap set against a larger volume requirement points to a round the regulator expects to be more competitive than the first.

The practical question for anyone bidding is whether a project works at a premium at or below the new cap, combined with the energy and ancillary revenue the asset can capture over its life. That second part is where the merchant view does the work, because the premium is only one layer of the stack and the rest depends on how the battery is dispatched across wholesale, balancing and ancillary markets.

Understanding that full revenue stack, across capacity support, wholesale capture and ancillary services, is what tells a developer whether a bid into this scheme holds together. SEMT brings market intelligence, origination and revenue monitoring into one place, so operators can see how a supported project performs against live market conditions rather than a single contracted number. If you would like to see how the numbers look for a storage project in Italy, you can sign up at https://synertics.io/signup/ or reach us at info@synertics.io.